1. Building Information Systems
Chapter 13
Building Information Systems
VIDEO CASES
Video Case 1: IBM: Business Process Management in a SaaS Environment
Video Case 2: IBM Helps the City of Madrid With Real-Time BPM Software
Instructional Video 1: BPM: Business Process Management Customer Story: Besthome Store
Instructional Video 2: Workflow Management: Visualized

2. How does building new systems produce organizational change?
Learning Objectives
How does building new systems produce organizational change?
What are the core activities in the systems development process?
What are the principal methodologies for modeling and designing systems?
What are alternative methods for building information systems?
What are new approaches for system building in the digital firm era?

3. New Systems Help Work Flow More Smoothly at Moen
Problem: Inefficient manual processes for capital expense reports (CER)
Solutions: Winshuttle workflow software for automating business form development and integrating with existing SharePoint and SAP systems
Demonstrates the use of information systems to streamline and redesign business processes
Illustrates ability of information systems to automat process, radically reduce costs and time

4. Systems as Planned Organizational Change
Structural organizational changes enabled by IT
Automation
Increases efficiency
Replaces manual tasks
Rationalization of procedures
Streamlines standard operating procedures
Often found in programs for making continuous quality improvements
Total quality management (TQM)
Six sigma

5. Systems as Planned Organizational Change
Structural organizational changes enabled by IT
Business process redesign
Analyze, simplify, and redesign business processes
Reorganize workflow, combine steps, eliminate repetition
Paradigm shifts
Rethink nature of business
Define new business model
Change nature of organization

6. ORGANIZATIONAL CHANGE CARRIES RISKS AND REWARDS
The most common forms of organizational change are automation and rationalization. These relatively slow-moving and slow-changing strategies present modest returns but little risk. Faster and more comprehensive change—such as redesign and paradigm shifts—carries high rewards but offers substantial chances of failure.
FIGURE 13-1

7. Systems as Planned Organizational Change
Business process management (BPM)
Variety of tools, methodologies to analyze, design, optimize processes
Used by firms to manage business process redesign
Steps in BPM
Identify processes for change.
Analyze existing processes.
Design the new process.
Implement the new process.
Continuous measurement.

8. AS-IS BUSINESS PROCESS FOR PURCHASING A BOOK FROM A PHYSICAL BOOKSTORE
FIGURE 13-2
Purchasing a book from a physical bookstore requires many steps to be performed by both the seller and the customer.

9. REDESIGNED PROCESS FOR PURCHASING A BOOK ONLINE
FIGURE 13-3
Using Internet technology makes it possible to redesign the process for purchasing a book so that it requires fewer steps and consumes fewer resources.

10. Systems as Planned Organizational Change
Various BPM tools used to:
Identify and document existing processes.
Identify inefficiencies
Create models of improved processes.
Capture and enforce business rules for performing, automating processes.
Integrate existing systems to support process improvements.
Verify that new processes have improved.
Measure impact of process changes on key business performance indicators.

11. Datacard Group Redesigns the Way It Works
How did Datacard Group’s previous business processes affect operations and decision making?
What management, organization, and technology factors contributed to Datacard Group’s problems with its business processes?
Diagram Datacard Group’s old and redesigned business process for pricing.
Describe the role of technology in Datacard Group’s business process changes.
How did Datacard Group’s redesigned business processes change the way the company worked? What was their business impact? Explain.

12. The Systems Development Process
Activities that go into producing an information system solution to an organizational problem or opportunity
Systems analysis
Systems design
Programming
Testing
Conversion
Production and maintenance

13. THE SYSTEMS DEVELOPMENT PROCESS
Building a system can be broken down into six core activities.
FIGURE 13-4
This graphic illustrates the six core activities of systems building. Ask students why these activities are represented as a circle.
The circular nature indicates that systems building is not a linear process that is finished once the system is built. Typically, additional changes and improvements will need to be made to the system or part of the system that will require additional analysis, design, programming, testing, conversion, and maintenance.

14. The Systems Development Process
Systems analysis
Analysis of problem to be solved by new system
Defining the problem and identifying causes
Specifying solutions
Systems proposal report identifies and examines alternative solutions
Identifying information requirements
Includes feasibility study
Is solution feasible and good investment?
Is required technology, skill available?

15. The Systems Development Process
System analysis (cont.)
Establishing information requirements
Who needs what information, where, when, and how
Define objectives of new/modified system
Detail the functions new system must perform
Faulty requirements analysis is leading cause of systems failure and high systems development cost

16. The Systems Development Process
Systems design
Describes system specifications that will deliver functions identified during systems analysis
Should address all managerial, organizational, and technological components of system solution
Role of end users
User information requirements drive system building
Users must have sufficient control over design process to ensure system reflects their business priorities and information needs
Insufficient user involvement in design effort is major cause of system failure

17. Table 13.1 Design Specifications
OUTPUT Medium
Content
Timing
INPUT
Origins
Flow
Data entry
USER INTERFACE
Simplicity
Efficiency
Logic
Feedback
Errors
DATABASE DESIGN
Logical data model
Volume and speed requirements
File organization and design
Record specifications
PROCESSING
Computations
Program modules
Required reports
Timing of outputs
MANUAL PROCEDURES
What activities
Who performs them
When
How
Where
CONTROLS
Input controls (characters, limit, reasonableness)
Processing controls (consistency, record counts)
Output controls (totals, samples of output)
Procedural controls (passwords, special forms)
SECURITY
Access controls
Catastrophe plans
Audit trails
DOCUMENTATION
Operations documentation
Systems documents
User documentation
CONVERSION
Transfer files
Initiate new procedures
Select testing method
Cut over to new system
TRAINING
Select training techniques
Develop training modules
Identify training facilities
ORGANIZATIONAL CHANGES
Task redesign
Job redesign
Process design
Organization structure design
Reporting relationships
Table 13.1 Design Specifications
Overview of Systems Development

18. The Systems Development Process
Programming:
System specifications from design stage are translated into software program code
Testing
Ensures system produces right results
Unit testing: Tests each program in system separately
System testing: Test functioning of system as a whole
Acceptance testing: Makes sure system is ready to be used in production setting
Test plan: All preparations for series of tests

19. A SAMPLE TEST PLAN TO TEST A RECORD CHANGE
FIGURE 13-5
When developing a test plan, it is imperative to include the various conditions to be tested, the requirements for each condition tested, and the expected results. Test plans require input from both end users and information systems specialists.

20. The Systems Development Process
Conversion
Process of changing from old system to new system
Four main strategies
Parallel strategy
Direct cutover
Pilot study
Phased approach
Requires end-user training
Finalization of detailed documentation showing how system works from technical and end-user standpoint

21. The Systems Development Process
Production and maintenance
System reviewed to determine if revisions needed
May include post-implementation audit document
Maintenance
Changes in hardware, software, documentation, or procedures to a production system to correct errors, meet new requirements, or improve processing efficiency
20 percent debugging, emergency work
20 percent changes to hardware, software, data, reporting
60 percent of work: user enhancements, improving documentation, recoding for greater processing efficiency

22. Table 13.2 Systems Development
SUMMARY OF SYSTEMS DEVELOPMENT ACTIVITIES
CORE ACTIVITY
DESCRIPTION
Systems analysis
Identify problem(s)
Specify solutions
Establish information requirements
Systems design
Create design specifications
Programming
Translate design specifications into code
Testing
Unit test
Systems test
Acceptance test
Conversion
Plan conversion
Prepare documentation
Train users and technical staff
Production and maintenance
Operate the system
Evaluate the system
Modify the system

23. Methodologies for Modeling and Designing Systems
Most prominent methodologies for modeling and designing systems:
Structured methodologies
Object-oriented development
Structured: Techniques are step-by-step, progressive
Process-oriented: Focusing on modeling processes or actions that manipulate data
Separate data from processes

24. Methodologies for Modeling and Designing Systems
Data flow diagram (DFD):
Primary tool for representing system’s component processes and flow of data between them
Offers logical graphic model of information flow
High-level and lower-level diagrams can be used to break processes down into successive layers of detail
Data dictionary: Defines contents of data flows and data stores
Process specifications: Describe transformation occurring within lowest level of data flow diagrams
Structure chart: Top-down chart, showing each level of design, relationship to other levels, and place in overall design structure

25. DATA FLOW DIAGRAM FOR MAIL-IN UNIVERSITY REGISTRATION SYSTEM
FIGURE 13-6
The system has three processes: Verify availability (1.0), Enroll student (2.0), and Confirm registration (3.0). The name and content of each of the data flows appear adjacent to each arrow. There is one external entity in this system: the student. There are two data stores: the student master file and the course file.

26. HIGH-LEVEL STRUCTURE CHART FOR A PAYROLL SYSTEM
FIGURE 13-7
This structure chart shows the highest or most abstract level of design for a payroll system, providing an overview of the entire system.

27. Methodologies for Modeling and Designing Systems
Object-oriented development
Object is basic unit of systems analysis and design
Object:
Combines data and the processes that operate on those data
Data encapsulated in object can be accessed and modified only by operations, or methods, associated with that object
Object-oriented modeling based on concepts of class and inheritance
Objects belong to a certain class and have features of that class
May inherit structures and behaviors of a more general, ancestor class

28. CLASS AND INHERITANCE
This figure illustrates how classes inherit the common features of their superclass.
FIGURE 13-8

29. Methodologies for Modeling and Designing Systems
Object-oriented development
More iterative and incremental than traditional structured development
Systems analysis: Interactions between system and users analyzed to identify objects
Design phase: Describes how objects will behave and interact; grouped into classes, subclasses, and hierarchies
Implementation: Some classes may be reused from existing library of classes, others created or inherited
Because objects reusable, object-oriented development can potentially reduce time and cost of development

30. Methodologies for Modeling and Designing Systems
Computer-aided software engineering (CASE)
Software tools to automate development and reduce repetitive work, including
Graphics facilities for producing charts and diagrams
Screen and report generators, reporting facilities
Analysis and checking tools
Data dictionaries
Code and documentation generators
Support iterative design by automating revisions and changes and providing prototyping facilities
Require organizational discipline to be used effectively

31. Alternative Systems Building Methods
Traditional systems life cycle
Prototyping
End-user development
Application software packages
Outsourcing

32. Alternative Systems Building Methods
Traditional systems life cycle:
Oldest method for building information systems
Phased approach:
Development divided into formal stages
“Waterfall” approach: One stage finishes before next stage begins
Formal division of labor between end users and information systems specialists
Emphasizes formal specifications and paperwork
Still used for building large complex systems
Can be costly, time-consuming, and inflexible

33. Alternative Systems Building Methods
Prototyping
Building experimental system rapidly and inexpensively for end users to evaluate
Prototype: Working but preliminary version of information system
Approved prototype serves as template for final system
Steps in prototyping
Identify user requirements.
Develop initial prototype.
Use prototype.
Revise and enhance prototype.

34. THE PROTOTYPING PROCESS
The process of developing a prototype can be broken down into four steps. Because a prototype can be developed quickly and inexpensively, systems builders can go through several iterations, repeating steps 3 and 4, to refine and enhance the prototype before arriving at the final operational one.
FIGURE 13-9

35. Alternative Systems Building Methods
Advantages of prototyping
Useful if some uncertainty in requirements or design solutions
Often used for end-user interface design
More likely to fulfill end-user requirements
Disadvantages
May gloss over essential steps
May not accommodate large quantities of data or large number of users
May not undergo full testing or documentation

36. Alternative Systems Building Methods
End-user development:
Allows end users to develop simple information systems with little or no help from technical specialists
Reduces time and steps required to produce finished application
Tools include
User friendly query languages and reporting
PC software tools

37. Alternative Systems Building Methods
End-user development (cont.):
Advantages:
More rapid completion of projects
High level of user involvement and satisfaction
Disadvantages:
Not designed for processing-intensive applications
Inadequate management and control, testing, documentation
Loss of control over data
Managing end-user development
Require cost-justification of end-user system projects
Establish hardware, software, and quality standards

38. Alternative Systems Building Methods
Application software packages
Save time and money
Many offer customization features:
Software can be modified to meet unique requirements without destroying integrity of package software
Evaluation criteria for systems analysis include:
Functions provided by the package, flexibility, user friendliness, hardware and software resources, database requirements, installation and maintenance efforts, documentation, vendor quality, and cost
Request for Proposal (RFP)
Detailed list of questions submitted to packaged-software vendors
Used to evaluate alternative software packages

39. Alternative Systems Building Methods
Outsourcing
Several types
Cloud and SaaS providers
Subscribing companies use software and computer hardware provided by vendors
External vendors
Hired to design, create software
Domestic outsourcing
Driven by firms need for additional skills, resources, assets
Offshore outsourcing
Driven by cost-savings

40. Alternative Systems Building Methods
Outsourcing (cont.)
Advantages
Allows organization flexibility in IT needs
Disadvantages
Hidden costs, for example:
Identifying and selecting vendor
Transitioning to vendor
Opening up proprietary business processes to third party

41. TOTAL COST OF OFFSHORE OUTSOURCING
FIGURE 13-10
If a firm spends $10 million on offshore outsourcing contracts, that company will actually spend 15.2 percent in extra costs even under the best-case scenario. In the worst-case scenario, where there is a dramatic drop in productivity along with exceptionally high transition and layoff costs, a firm can expect to pay up to 57 percent in extra costs on top of the $10 million outlay for an offshore contract.

42. New Approaches for System Building
Rapid application development (RAD)
Process of creating workable systems in a very short period of time
Utilizes techniques such as:
Visual programming and other tools for building graphical user interfaces
Iterative prototyping of key system elements
Automation of program code generation
Close teamwork among end users and information systems specialists

43. New Approaches for System Building
Joint application design (JAD)
Used to accelerate generation of information requirements and to develop initial systems design
Brings end users and information systems specialists together in interactive session to discuss system’s design
Can significantly speed up design phase and involve users at intense level

44. New Approaches for System Building
Agile development
Focuses on rapid delivery of working software by breaking large project into several small subprojects
Subprojects
Treated as separate, complete projects
Completed in short periods of time using iteration and continuous feedback
Emphasizes face-to-face communication over written documents, allowing collaboration and faster decision making

45. New Approaches for System Building
Component-based development
Groups of objects that provide software for common functions (e.g., online ordering) and can be combined to create large-scale business applications
Web services
Reusable software components that use XML and open Internet standards (platform independent)
Enable applications to communicate with no custom programming required to share data and services
Can engage other Web services for more complex transactions
Using platform and device-independent standards can result in significant cost-savings and opportunities for collaboration with other companies

46. Application Development for the Digital Firm
Mobile application development
Mobile Web sites
Mobile Web apps
Native apps
Special requirements for mobile platform
Smaller screens, keyboards
Multitouch gestures
Saving resources (memory, processing)
Responsive Web design
Web sites programmed so that layouts change automatically according to user’s computing device

47. The Challenge of Mobile Application Development
What management, organization, and technology issues need to be addressed when building mobile applications?
How does user requirement definition for mobile applications differ from that in traditional systems analysis?
Describe Alex and Ani’s sales process before and after the mobile application was deployed.